Backlash stops Olive Garden and Red Lobster from cutting worker hours to avoid Obamacare

The whopping 25 percent of hourly workers who get full-time work at Olive Garden, Red Lobster, and other Darden Restaurants chains must be breathing a sigh of relief, as the company has said it won't be following through with its plan to cut all hourly workers below the 30 hours a week that would qualify them for employer-provided health coverage under Obamacare. Anyway, Darden won't be doing that yet, while the bad publicity around such decisions persists:

After Darden's tests were reported in October, the company received a flood of feedback from customers through its website, on Facebook and in restaurants, said Bob McAdam, who heads government affairs and community relations for Darden. Additionally, he said that internal surveys showed both employee and customer satisfaction declined at restaurants where the tests were in place.

"What that taught us is that our restaurants perform better when we have full-time hourly employees involved," he said.

McAdam declined to give specifics on the internal surveys but said the decline was "enough to make a decision." Beyond the first year of the regulation, however, the company said it still needs to see how costs and other factors play out to determine what its workforce will look like in following years.

Darden cited bad publicity from its decision to cut all hourly workers below 30 hours a week to avoid providing health insurance as one factor in its lowered earnings expectations. The strongly negative response to Darden's Obamacare threats to workers casts further doubt on the claims by Papa John's that similar statements by its CEO had not hurt its reputation or earnings.

Other top chains, including McDonald's and the parent company of Carl's Jr. and Hardee's, have also said they might move to more part-time workers, in an industry that's already heavily part-time. Neither can many of these workers easily have second jobs, given that today's part-time jobs often have unpredictable schedules handed down at the last minute. While cutting work schedules to 28 hours because 30 hours would entitle the worker to health care is a specific response to Obamacare, it's just a minor extension of the ways all these chains have been squeezing workers for years.